U.S. President Donald Trump is actively reshaping the leadership of the Federal Reserve, putting pressure on current chair Jerome Powell. With new nominations and public criticism, Powell's influence on markets is significantly decreasing.
Impact of New Nominations
President Trump appears intent on weakening the influence of Fed Chair Jerome Powell by appointing new board members. If a successor is announced, market focus will shift from Powell to the new appointees. Analysts highlight an effect called 'Phantom Fed Chair': once the new name is revealed, investors will start reacting to their statements, disregarding Powell.
Stephen Miran Nomination
This week, Trump nominated Stephen Miran, former head of the Council of Economic Advisors, for a position on the Fed Board of Governors. He will replace Adriana Kugler and serve until January 31, 2026. Known for his pro-crypto stance and support for looser monetary policy, Miran's appointment may indicate Trump's goal of creating a central bank more aligned with his economic vision.
Criticism and Pressure on Powell
Trump has intensified his criticism of Powell, labeling him 'too political' and 'too late' on rate cuts. While the president cannot directly fire him, these public jabs are seen as an attempt to undermine his authority. Powell continues to defend his position despite this pressure, maintaining the recent decision to keep interest rates unchanged at the last FOMC meeting.
The changes in Fed leadership under Trump create a new dynamic in markets. Investors are closely watching developments, as appointments and statements could greatly influence future economic decisions and strategies.
